Biocon shares may face a correction over the next year as the company works through earnings dilution from its merger, according to Chola Securities.

Dharmesh Kant, Head of Research at Chola Securities, noted that Biocon has carried high market expectations for years without matching profit growth. He said the company has delivered “9–10% kind of a growth” at best over the last decade, while return ratios stayed low.

Kant added that the recent merger with Biocon Biologics Ltd (BBL) may not help near-term earnings. “It’s EPS dilutive,” he said, pointing to dilution from the QIP and higher expenses due to debt. He expects a year or more before synergy benefits show up, saying business will continue, but there is “nothing great out there.”

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